|reply to rradina |
Re: Key Phrase
Also keep in mind coax has a lot of bandwidth left. I saw an article where they beleive they can get 10 gig down/ 10 gig up out of coax.
Telephone wire has less total speed you can get out of it before you have to start bonding together wires.
Coax problem is the docsis spec and the split into channels. If you made the coax one big pipe and did everything over it speeds would be much higher.
I agree with those statements and coax's bandwidth has been an enabler that allows an incremental fiber push toward the consumer. However that's getting away from my question of economics. I interpreted Metatron's reference to Verizon's high initial costs (i.e. having to run fiber the whole way) as one reason why Verizon might have cost pressure on their rates (i.e. big interest payments on billions in build-out debt). My question is whether a big bang or evolutionary approach to pushing fiber to the consumer is cheaper. If Big Bang is cheaper because of the future material and wage costs that an incremental approach incurs, then Verizon should not have undue cost pressures causing higher rates. If they do, then perhaps that's why they are only competitive with cable in terms of rates.
You might also say I'm looking for a reason other than collusion/oligopoly for why Verizon would price it's package the same as competitors.
It's also a matter of architecture. If VZ went w/ active ethernet, they could have scaled out as necessary versus PON topologies which require higher distribution costs. Also ethernet would allow better diagnosis. GPON requires a truck roll to ferret things out if things go south. I see VZ trucks in my neighborhood almost as often as TWC, and nobody if getting hooked up. That ship is sailed. They are performing costly opex maintenance.
My FIOS outages have been headend bonehead failures and subtle items like poor handling of CC and new DRM restrictions. Every now and then there is some network issue is NY/VA that causes burps but to the house no problems. I live in UNY, and w cable every 3-4 years they needed to run a new cable because the contractors who come out did such a poor job of terminating and trenching the coax. Snow and water doesn't help either...I for one am glad VZ woke up. The problem is that if they want to jack my bill 30% in 1 year--I'm not in love...
Now the glory of FTTH is supposed to be much lower opex (which makes up for higher capex) and the fact the fibre should last 100 years in the ground. Frankly speaking the trenching cost is about the same for fibre and copper, and wire costs aren't that much different. In fact you cable company runs fibre just the same... They overstrand, so they can always bond a new pair if necessary. Already though they have gotten themselves into trouble with BPON and new routers already only after a few years. If they went EPON or straight ethernet that would be a different story.
If you want economics compare Uverse (incremental VDSL) to FIOS (FTTH). Obviously the smarter LONG TERM move was FTTH because AT&T has decrepit lines in much of their plant and they need those damn refrigerators all over the place. But for capex reduction, they have VZ beat, however overall FTTH should prove out better.
If AT&T is smart (they are), they use their infrastructure and use white space wireless from the refrigerator to the local houses when that comes. Problem solved. Cantennas for everyone.
As for pricing in most markets there is only 1 competitor, so it's pretty easy to price signal according to the other guy. Wireless for all it's charm doesn't have the economics to compete yet in the home.